US business economists want the government to spend more money to boost growth and believe that raising taxes is as important as spending cuts to reduce the deficit, according to a survey released yesterday.
As the two US presidential candidates battle over how to reduce the deficit, the National Association of Business Economists (NABE) came down clearly on the side of US President Barack Obama’s Democrats.
A poll of the group’s members showed 45 percent favoring more stimulus spending next year and 22 percent for keeping current levels unchanged. Only one-third wanted more restrictive fiscal stimulus next year.
However, a majority, 54 percent, believed that spending should be cut back in 2014, whereas only a quarter felt the need for still more stimulus spending that year.
“Generally, there is not much support among the economists surveyed for policy tightening over the next 12 months,” the economists’ group said.
Meanwhile, those surveyed backed a balanced approach to trimming the deficit when it comes.
Of the 236 NABE members surveyed last month, 45 percent believe that deficit cutting should involve equally tax increases and spending cuts.
Another 31 percent felt that the reduction effort should involve “mostly” spending cuts, while 14 percent felt it should mostly come from tax hikes.
The findings weighed into the heated presidential and congressional election battle, with a key issue ahead of the Nov. 6 vote being how best to address the gaping US budget deficit and debt burden.
Obama rival Mitt Romney’s Republicans are pressing to slash spending and strongly oppose raising taxes, while Democrats have continued to advocate a more tax-focused effort to boost government revenues.
Most of the economists also backed tax reform that would increase revenues, via eliminating various tax loopholes as well as subsidies that many wealthy households and large businesses enjoy.
However, NABE also said that an “overwhelming majority” of those surveyed felt that the main issue holding back the US economy is the uncertainty that surrounds policy and that has arisen from the stalemate between the two parties.